|LO 3.3 |Explain how a business can be vicariously liable |P 3.3 |Individual |

|LO4 Be able to apply principles of liability in negligence in business situations. |Grading |Assessment Type |

| |(P/M/D) | |

|LO 4.1 | |P 4.1 |Individual |

| |Apply the elements of the tort of negligence and defences in different business | | |

| |situations. | | |

|LO 4.2 | |P 4.2 |Individual |

| |Apply the elements of vicarious liability in given business situations. | | |

Case Study 1 (Offer and acceptance)

• On Monday, Arnold placed an advertisement in “The Daily Muck” which read ‘£ 10,000 Reward-for the safe return of Bessy, a prize winning Holstein cow’. A description of Bessy was given which included the fact that she was wearing a collar bearing her name and that she had left Arnold’s field with her sister cow, Clara. On Tuesday Daniel, having read the advertisement, set off to the countryside to search for Bessy and Clara. Daniel spent £100 on his railway ticket and £250 on a week’s accommodation.

On Wednesday, Edwin, a neighbor of Arnold’s, found Bessy and wrote to Arnold that “£10,000 is not nearly a sufficient reward for a cow of this value-would you pay £15,000?” Later that day, Bessy broke out of Edwin’s barn. Frank found her on Thursday and took her back to his farm.

• On Friday, Daniel found Clara and returned her to Arnold. Arnold refused to pay Daniel anything and decided to cancel his reward advertisement. He placed a small note on the door of the village shop announcing that no moneys were payable for the return of Bessy. Frank, noticing Bessy’s address on her collar, took her to Arnold on Saturday. As Arnold was not in, he left her in Arnold’s field and returned home. Edwin, noticing Frank’s actions, left a note at Arnold’s house claiming the reward.

Case Study 2 (Terms of Contract)

• When conditions and warranties breaches at the time of the contract formation or after the contract formation remedies sometimes prevent the contract revoke by the parties.

Case Study 3 (Consideration)

• Fiste is the leader of a newly formed political party called “stronghold”. He organizes an open air rally in Hyde Park to publicize the party.

Perkup contracts with Fiste to provide catering facilities at the rally at a cost of £4,000.Wilful agrees to fly an aircraft over the rally trailing a banner showing the party’s emblem of the ‘all-seeing eye’. Wilful declines payment for these services saying that his commitment to the party will be reward enough.

Grippe, a prominent supporter of the party, writes to Fiste saying that he ‘hopes the rally will be the first step towards putting some backbone into the country’ and that, accordingly, he will provide £10,000 ‘to help with expenses’.

Fiste is determined that the rally should be successful and,at the last minute, he agrees to pay Perkup ‘a bonus of £1,000 to ensure that things run smoothly’. Similarly, fearing trouble from the ‘urban Vigilante Party’ Fiste asks for an increased police presence for which service he agrees to pay £ 2,500.

The rally is a success but Fiste refuses to pay the £1,000 bonus to Perkup and the £ 2,500 to the police. Wilful finds that his costs were more than anticipated and Fiste promises to ‘reimburse him fully in due course’. Grippe informs Fiste that he cannot pay the £10,000 as his business is not prospering. Consequently, Fiste refuses to reimburse Wilful.

Case Study 4 (Privity to Contract)

• It is clearly desirable to amend the rule that a third party may not sue for a contract which is made for offoror’s and oferee’s benefit. Analyse the question.

Case Study 5 (Negligence Duty of Care)

• Don, the driver of a stock car, negligently fails to maintain his vehicle. In the course of a race, which is being televised, Don’s brakes fail and car crashes into a crowd of spectators. The car narrowly misses Albert but strikes and kills Bob. Bob’s daughter, Claire, is very badly injured, but survives and is taken to hospital.

Albert, a person of unusually nervous disposition, develops an anxiety neurosis. Freda, a friend of Bob, is present at the scene of the accident. At first, she attempts to help, but realizing that Bob is dead and that Claire is being dealt with by professionals, Freda rushes back to tell Bob’s wife, Glenda, what has happened. Sometime later, Glenda, who is also Claire’s stepmother of six months’ standing, drives to the hospital and asks to see Bob and Claire. Glenda is shown Bob’s body, and sees Claire on a hospital trolley, awaiting treatment, crying in pain and in a badly disfigured state.

Harriet, Bob’s mother, sees a live television broadcast of the events, recognizes her son in the crowd and realizes that Don’s car has crashed into the area where her son is standing. Freda, Glenda and Harriet are all horrified by what has happened. Both Freda and Glenda suffer from reactive depression. Harriet helps care for Glenda and Claire following the accident and becomes a recluse because of her inability to come to terms with the psychological suffering of Glenda and the physical injuries suffered by Claire.

Advise Albert, Freda, Glenda and Harriet

Case Study 6 (Negligence Duty of Care – Causation)

• Adeel is crossing the road at a pedestrian crossing when he is struck by a car driven by Beatrice. Adeel is knocked to the ground and staggers to his feet, but is concussed and blinded by blood from a head wound. He is then hit by a car driven by Cassandra, who was texting on her mobile at the time, and knocked to the ground again, unconscious. Beatrice and Cassandra have both been breath-tested by the police, and Beatrice has been found to be significantly affected by alcohol.

Adeel has serious injuries which will make it impossible for him to work again, but his doctors are not able to say which car caused those injuries. Adeel’s laptop computer was also damaged, causing information to be destroyed which led to loss of business for his employers, FatCat Ltd. Advise Adeel and FatCat Ltd whether they have any remedy against Betrice and/ or Cassandra.

Case Study 7 ( Employer’s Liability- Vicarious liability)

• Eric and Roland are employed to clean the windows in a factory operated by Plasticraft Ltd. Neither is wearing a safety harness. Roland is working five meters from ground level and Eric is working seven meters from ground level. Eric slips and falls on to Roland. Both are injured.

The noise causes Norman to look away while he is sharpening a chisel on an abrasive wheel. Norman’s finger is badly injured when it touches the rotating wheel.

Evidence shows that a device could have been fitted to the wheel which would cause it to stop as soon as a chisel cases to make contact. Plastcraft Ltd claim not to have resources to be able to fit such a device. During the incident, Norman drops a burning cigarette, which ignites some rags on the floor. Because fire extinguishers have not been properly maintained, the fire spreads and damages a car owned by Percy, a visitor to the factory.

Advise Plasticraft Ltd of their tortuous liability for breach of the Regulations.

Case Study 8 (Economic Loss)

• Badman Batty, construction contractors, are engaged by Crumbridgeshire County Council to resurface a 10 mile stretch of the Crumbridge ring road. Badman Batty hires a surface stripping machine in order to facilitate the work.

Bob, a surveyor, employed by the County Council, but on loan to Badman Batty decides he is capable of using the surface stripping machine but sets the controls in such a way that too deep a cut is made. As a result of this, the machine severs a water main with the result that the road and nearby power generator are flooded. The following party claim damages for negligence.

a) Peter, a businessman, was driving on the ring road at the time of the incident and claims he has been prevented from attending a meeting at which he had high hopes of securing a £ 500,000 contract with another business.

Advise Badman Batty of their potential liability in tort.

GRADE DESCRIPTORS

Pass Grade

A pass grade is achieved by meeting all the requirements defined in the assessment criteria to pass for each unit.

GRADE DESCRIPTORS

|Criteria for PASS |Possible evidence |Feedback |

|1.1) |Explain the elements required for the formation of contract. | |

|Explain the importance of the essential elements required for the |Explain offer and acceptance which is a main element of the contract. | |